Hepatocellular carcinoma (HCC) is a common tumor worldwide. Its incidence has tripled in the USA during the last 25 years, and its prognosis is very poor. Although the main etiologic factors for HCC are well known, its pathogenesis is poorly understood. Thus, there is an urgent need for studies of the mechanisms of HCC development relevant to the human disease. HCC generally develops in cirrhotic livers in the presence of chronic inflammation, after a long phase consisting of hepatocyte proliferation and apoptosis. Oxidative stress generated in this environment can cause DMA damage that leads to chromosomal instability and disruption of cell cycle checkpoints. We have proposed that chromosomal instability, an almost universal finding in human HCC, may be caused by defects in the non-homologous end-joining (NHEJ) DMA repair pathway for double strand breaks (DSB). We have shown that the lack of the Ku70 component of NHEJ repair pathway accelerates HCC development in mice injected with diethylnitrosamine (DEN), and produces tumors with multiple numeric and structural chromosomal aberrations. A striking feature of tumorigenesis in Ku70-/- mice is the almost complete lack of p53 protein expression without alteration in p53 mRNA levels. We suggest that lack of p53 protein expression is caused by post-translational mechanisms that destabilize p53 through increased Mdm2 binding and proteasomal degradation. In contrast, mice that have a defect in ATM, a major transducer of DNA damage, are completely protected from DEN tumorigenesis for at least 12 months, and show large increases in p53 protein expression. We propose experiments designed to study the mechanisms of accelerated tumorigenesis in Ku70-/- mice, and HCC resistance in Atm-/- mice, and to determine: a) whether HCC development and chromosomal instability associated with Ku70 deficiency can be blocked by proteasome inhibitors and restoration of p53 activity through liver-specific inhibition of Mdm2 activity;b) whether HCC resistance in Atm-/- mice can be abolished by liver specific expression of mutant p53;c) whether human HCC and dysplastic lesions have altered expression of components of the NHEJ repair pathway, and d) whether molecular and karyotype homologies exist between human and Ku70-/- HCCs. The proposed experiments will increase our understanding of the mechanisms of hepatocellular carcinogenesis, and test therapeutic strategies that might be applied to human tumors.